TC09587 - [2025] UKFTT 00875 (TC)

The following facts were found from the documents produced in the bundle, and where the documents were not included in the bundle, the chronology and contents of the letters were agreed as set out above.

On 19 February 2016 the Appellant notified the Respondents that he was making a land purchase and requested confirmation that he would be reimbursed the VAT that would be paid upon it.

On 26 February 2016 the Respondent replied by letter stating that the repayment would need verification and requesting further information and documents relating to the purchase and intended use of the property.

On 19 July 2017 the Appellant notified the Respondents of an Option to Tax (OTT) with an effective date of 10 February 2016.

On 4 September 2017, the National Option to Tax Unit (NOTTU) responded to the notification. The notification was considered to be a belated notification and the Respondent asked for further information including evidence to support the date that the decision effective date requested, and a signed statement confirming that all tax and VAT treating to the property had been properly accounted for.

On 17 October 2017, Wine & Co (the Appellant’s agent) supplied a copy of the draft Completion Statement for the purchase of property called “The Piggeries”, detailing a purchase price of £691,629 and £110,455 VAT.

On 4 January 2018, the Respondents wrote to the Appellant advising that until the OTT was resolved the VAT did not relate to taxable supplies. The letter re-requested the outstanding information.

On 15 February 2018 the Respondents again wrote to the Appellant requesting the information.

On 17 July 2020 the Respondents wrote to the Appellant notifying him that that the refund of VAT totalling £110,455 claimed through the 04/16 VAT return was denied. The letter stated that the decision could be reviewed if the Appellant obtained a decision from the NOTTU allowing the belated notification. The letter “strongly advise[d]” the Appellant to respond to the letter dated 15 February 2018. The letter offered an internal review and stated “If you do not want a review, you can appeal to HM Courts and Tribunal Service, but you must do this within 30 days of the date of this letter”.

On 4 August 2020, the Appellant’s agent requested a review.

On 10 September 2020, the Respondent’s Review Team acknowledged the request for a review, and stated, “Unless I hear to the contrary from either you or your agent, I will assume that you have no objection to the review period being extended so that it expires on 17 December 2020”.

On 17 December 2020, a review letter was issued, upholding the decision. The letter advised the Appellant that if the decision was not agreed, then an appeal should be notified to the Tribunal within 30 days of the date of the letter, although, due to the Covid 19 pandemic, HMRC would not object to a late appeal if such notification was made within 3 months of the end of the 30-day period.

On 21 December 2020, the Appellant’s agent wrote to the Respondents stating the Appellant’s outstanding £110,455 input tax payment should be repaid because the review conclusion letter was received on 21 December 2020, which was 4 days after the agreed extension and 4 days after the date on the letter.

On 04 January 2021, the Respondents replied, stating that the review was not concluded late and advised that the only remaining option was to lodge an appeal with the Tribunal.

On 31 May 2022 a warning of bankruptcy letter was sent to the Appellant in respect of outstanding taxes of £111,836.34.

On 30 August 2022 a warning of bankruptcy letter was sent to the Appellant in respect of outstanding taxes of £114,844.33.

On 9 September 2022 the Appellant wrote to the Respondent asking it to refrain from taking further action until, “we have the opportunity to speak to you about this matter in full”.

On 15 September 2022, the Respondent wrote to the Appellant stating that if the Appellant wished to take the matter further, the Appellant should appeal to the Tribunal, together with a reason for the lateness of the appeal.

On 26 October 2023, the Appellant wrote to the Respondent’s Debt Enforcement department, stating that the VAT reclaim had “never been resolved”, noting that the Respondent had advised an appeal to the Tribunal in its letter dated 15 September 2022 and stating “However the matter goes back to 2016 and one wonders whether the Tax Tribunal would accept our late appeal”. The letter went on to state:

“Can you please confirm that if we now appeal to the Tax Tribunal to hear the case, HMRC will NOT OPPOSE this request.”

The Appellant’s Notice of Appeal was generated online on 15 January 2024. In the section entitled “Reason for Late Appeal”, the Appellant wrote, “We are late with our appeal because of ongoing issues caused during the pandemic”. In the section entitled “Grounds of Appeal”, the Appellant wrote “We do not agree with the HMRC decision not to repay the amount of VAT under discussion”.

On 19 February 2024 the Respondents applied to the Tribunal Rule 5(3)(c) and (d) of the Tribunal Procedure (First-Tier Tribunal) (Tax Chamber) Rules 2009 for directions requiring that the Appellant file and serve amended grounds of appeal regarding both the substantive appeal and the late appeal application. The application requested that:

“a)

The amended grounds should detail the reasons why the appeal is lodged 3years and 29 days late.

b)

The amended grounds of appeal should expand upon the reason of‘ongoing issues caused during the pandemic’.

c)

The amended grounds of appeal in respect of the substantive matter shoulddetail why they disagree with the Respondents decision to disallow the inputtax claim in VAT period referenced 04/16, totalling £110,455.00.

d)

The amended grounds of appeal should detail the legal and factual groundsrelied upon in support of their appeal. The Appellant should indicate whythey believe the facts or legal reasoning relied upon by the Respondents areincorrect”

On 13 June 2024, the Tribunal directed further and better particulars from the Appellant by 27 June 2024.

On 20 November 2024 the Appellant responded. In a document entitled “Answers to the Respondents’ Application for Further and Better Particulars” the Appellant set out: